Work from home helps drive up wearable market by 30% – IDC

The Q1 wearable shipment numbers showed strong growth, with the wireless headset segment up by nearly 70%, partly driven by working from home employees’ need to block out unwanted noise.

In its latest wearable tracker, the research firm IDC saw the overall market go up by 29.7% over the same quarter in 2019. The strongest growth was in the so-called ‘hearables’ segment, which is essentially wireless earphones and headsets. This segment increased by 68.3% and accounted for 54.9% of the 72.6 million wearable market.

“The hearables category was seemingly resilient to the market-suppressing forces caused by COVID-19,” said Jitesh Ubrani, Research Manager for IDC Mobile Device Trackers. “Consumers were clamouring for these sophisticated earpieces not only for the abilty to playback audio but also to help them increase productivity, as many of them were forced to work from home and sought ways to reduce surrounding noise while staying connected to their smartphones and smart assistants.”

The other categories in the total wearable market includes wristbands and watches. IDC estimated the wristband segment grew by 16.2%, helped by the launch of Fitbit’s new Charge 4. However, the watch category has seen a 7% decline. IDC attributed the contraction primarily to supply chain disruption in China caused by COVID-19.

“The downward pressure on watches shifts the onus to the latter half of 2020,” said Ramon Llamas, Research Director for IDC’s Wearables Team. “This gives companies the time to refine their products and messaging, and to align those with customer needs. Given the hyper focus on overall health and fitness in today’s climate, vendors would do well to highlight those capabilities, and provide guidance on how to live healthier lives.”

Incidentally, this estimate of the watch market is rather different to the smartwatch market numbers published by Strategy Analytics earlier this month, when it estimated a 20% increase in the segment. SA also believed Apple Watch volume grew by 23% in Q1 to reach 7.6 million.

“Apple’s global smartwatch market share has grown from 54 percent to 55 percent, its highest level for two years,” Neil Mawston, Executive Director at Strategy Analytics said. “Apple Watch continues to fend off strong competition from hungry rivals like Garmin and Samsung. Apple Watch owns half the worldwide smartwatch market and remains the clear industry leader.”

IDC, on the other hand, put Apple Watch’s sales volume in Q1 at 4.5 million units, down by 2% from a year ago. Such is the difficulty posed to research firms when Apple, the market leader does not disclose device volumes.

It is also worth noting that the two research firms are reporting on slightly different market segments. IDC, in addition to smartwatch, also includes what it calls ‘basic watch’ in its market estimate, by which it refers to those watches that have computing and data processing power as well as wireless connectivity but do not run third-party applications. IDC does not split the volume of two types of watches it reports on in its publicly available data.

Here are the market estimates from the two firms:

Global smartphone shipments fall by 17% coz of coronavirus

The latest smartphone shipment numbers from Strategy Analytics reveal an unprecedented drop that can only be due to the COVID-19 pandemic.

Total shipments of 274.8 million units in the first quarter of this year represent a 16.8% decline on the year-ago total. No vendors were spared the austerity, bar Xiaomi, which at least managed to tread water thanks to its Indian presence. Apple declined the least out of the big three, so has gained a chunk of global market share compared to Q1 2019.

“As expected, the global smartphone market delivered its worst performance since records began,” said Linda Sui of SA. “Demand for smartphones slammed to a halt in the quarter, as the Covid-19 virus scare shut down major economies like China and shoppers placed their spending plans on hold.”

“This was Samsung’s lowest quarterly smartphone shipments for eight years,” said Neil Mawston of SA. “Despite a strong line-up of A, S and Note series models, Samsung was unable to escape the virus-led plunge in smartphone demand. Despite US-China trade wars and the Covid-19 virus scare, Huawei was able to maintain its global smartphone share at a respectable 18 percent during the quarter. China remains Huawei’s core region and most of its sales take place there.”

“Apple’s global smartphone market share has risen from 13 percent to 14 percent in the past year,” said Woody Oh of SA. “Apple’s new iPhone SE model with lower pricing and larger presence in emerging markets like India will give volumes a further bump in the coming months.”

If the production forecast is anything to go by, the global smartphone numbers could be even worse next quarter. Supply chains are disrupted and discretionary consumer spend has gone down the toilet, while everyone sits tight and waits to see how things will play out. As with so many other industries, the smartphone sector will have its fingers crossed for an explosion of pent-up demand in the second half of this year.

Incidentally, other analyst firms are increasingly publishing their numbers on the same day as SA, which we use as our primary source. It’s interesting to see how their estimates vary, so we’ve copied the Omdia and IDC tables below too.

Chinese smartphone sales plummet

The latest numbers from Counterpoint Research reveal Q1 2020 smartphone sales in China plunged by 22%.

Somehow Huawei managed to buck that trend, however, as it continues to go from strength to strength in its home market. The table below reveals all of Huawei’s Android competitors experienced annual sales declines of between 27% and 40%, yet Huawei miraculously increased its smartphones sales by 6%. Looks like all that R&D spend is really paying off! Meanwhile Apple held firm as rich people continued to be rich.

“The drastic fall in Q1 China market was primarily dragged down by the dismal sales of smartphones in February (-35% YoY), when the country was severely impacted by the COVID-19 pandemic and commerce activities were minimal,” said Flora Tang of Counterpoint. “However, during the lockdown period in China, local e-Commerce giants such as Alibaba and JD.com managed to sustain efficient business operations and delivery services in major Chinese cities outside of Hubei province.

“For the strong support from these e-Commerce players, China’s smartphone sales appeared less negative than our original expectation.  We also estimate that the online share of smartphone sales in China surged to over 50% during Q1, from about 30% in 2019, though the share is likely to drop in Q2 after the pandemic is largely contained.”

“iPhone 11 was the best-selling smartphone model in Q1; it has topped China’s best-selling models list for 7 consecutive months,” said Ethan Qi of Counterpoint. “Consumers continued to purchase iPhones from e-commerce platforms despite the shutdown of Apple stores across China during February. As for the Huawei group, it continued to lead and gained share with a complete product portfolio covering the entry-level to premium segments. Huawei Mate 30 5G, Mate 30 Pro 5G, Huawei Nova 6 5G, and HONOR 9X were all among the top-selling models list during the quarter.”

On reason for Huawei’s exceptional performance could be its early entry into the 5G market. According to Counterpoint that market alone grew by 120%, compared to Q4 2019. “The dominance of Huawei in China’s 5G smartphone market was more evident— it contributed to over half of the total 5G phone sales in Q1, followed by Vivo, OPPO, and Xiaomi,” said Mengmeng Zheng of Counterpoint.

“By Q1 2020, various vendors had launched the sub-US$400 5G smartphones in China, such as Vivo Z6 5G, Xiaomi K30 5G, realme X50 5G, and ZTE AXON 11 5G. For the aggressiveness of Chinese OEMs to grow the penetration of 5G phones to lower-tier price bands, we expect 5G smartphones to rise to account for over 40% of total smartphone sales in China by the end of 2020.”

Despite that, Huawei was still in second place globally in terms of Q1 5G phone sales, according to Strategy Analytics. “Samsung vaulted into the lead in Q1 2020, shipping 8.3 million 5G smartphones globally in Q1 2020,” said Ville-Petteri Ukonaho of SA. “Samsung has strong global distribution networks and operator partnerships and new 5G smartphones in Q1 2020. Nearly all of Huawei’s 5G smartphones were shipped in China.”

“Chinese smartphone vendors captured 61 percent of top 5 vendor 5G smartphone shipment volumes in Q1 2020, with the majority of those volumes going to the Chinese market,” said Neil Mawston of SA. “This reflects the speed with which Chinese operators have rolled out 5G networks, as well as the underlying demand for 5G smartphones, despite the Covid-19 pandemic that shut down large parts of China during the Q1 2020 period. As China continues to ramp up economic activity, we expect 5G shipments to this market to continue to expand dramatically in 2020.”

Here’s the SA Q1 table. They might want to have a rethink about that moody bold font.

Google Pixel starts to challenge Samsung in UK Android market

The UK Android smartphone market is dominated by Samsung, but its OS partner is starting to pose a serious threat, according to new research.

The numbers come from analyst firm Strategy Analytics, which has been looking into the specific Android models that are sell best over here. As you can see from the table below covering Q4 2019 Samsung models, specifically the flagship S series and the cheaper A series, dominate. But for the first time Google is starting to look like a serious player in terms UK smartphone shipment volume.

“Pushing into the UK top-ten is Google Pixel 4 XL in 8th place,” said Juha Winter of SA. “Google Pixel 4 XL is proving popular in the UK due to its decent specs, big-enough screen, solid retail support from major carriers like EE, and heavy marketing promotion leading up to the Xmas shopping season. Google Pixel has also filled some of the gap left by Huawei, whose UK presence is shrinking due to ongoing US trade wars.”

“Among the Android segment, Samsung took 8 of the top 10 spots in the UK in the fourth quarter,” said Neil Mawston of SA. “Google Pixel grabbed one, and Huawei also captured one. Samsung Galaxy A70 is the UK’s no.1 bestselling Android smartphone model. It is surprising to see a midrange model at the summit of the charts.

“The A70 is a sign that some UK consumers are trading down to lower-priced devices with ‘good enough’ specs and techs. Samsung S10 is in 2nd place, and S10+ sits in 4th place. Premium smartphone models are still selling well, but less so than a few years ago.”

The overall leading models will still be Apple ones, but a reason for that is that there are so few of them. That may also be a factor in the rise of the Pixel, but it’s still intriguing to see Google’s own efforts getting some serious traction. Another probable source of appeal will be the clean user interface and the fact that Pixels get Android updates before everyone else.

The global tablet market is shrinking

The latest global tablet shipment numbers from Strategy Analytics show the overall market shrank by 10% in Q4 but was otherwise boringly stable.

SA reckons 48.5 million tablets were shipped in Q4 2019, a significant decline from 54.4 million in the year-ago quarter. Annual shipments fell from 173.1 million to 160,2 million, implying the rate of decline may be accelerating. Within that, however, market shares remained very stable, with Apple still way ahead of any Android or Windows vendor.

“A massive shift has taken place for Huawei to focus on the domestic Chinese market and sell older inventory in EMEA and Asia (excluding China),” said Eric Smith of SA. “This pattern will intensify until the China-US trade war reaches detente and while there have been positive signs with the Phase 1 trade deal signed last month, tariffs and US component/software supply restrictions are still in place, and will likely will be until after the November 2020 US presidential election.”

“The commercial refresh has been a disappointing period for Detachables as Windows mobile computing demand has favored thin-and-light notebooks in the premium tier,” said Chirag Upadhyay of SA. “Adding to this trouble, most Windows Detachable 2-in-1 vendors are exclusively targeting the premium tier for enterprise users to make higher profits but a crowded market prevents all vendors from growing at once, especially now that Apple is competing strongly with two iPad Pro models and an iPad Air (with keyboard) in this price tier.”

So it looks like part of the blame for the tablet market decline is the US China trade aggro, but if so why are tablets more exposed to it than smartphones, which seem to be doing fine? The advent of hybrid laptop/tablets with detatchable keyboards seems to complicate the job of classifying shipments, but we suspect the main reason for the decline is that tablets have a much longer refresh cycle than phones as newer models offer nothing more than minor spec upgrades.

Q4 2019 smartphone market: Apple bounces back as Huawei retreats

The Strategy Analytics numbers for the Q4 2019 global smartphone market are out and a couple vendors fared much better than the rest.

The overall market contracted for the second year running, but less so than in 2018, perhaps indicating a 5G-fuelled recovery. For the quarter the big success story was Apple, which reversed its declines in previous quarters and delivered its best shipment numbers for a couple of year. Similarly Xiaomi rescued its year with a massive 27% increase in smartphones out the door.

The big loser in Q4 2019 was Huawei, which saw the end of a two-year growth spurt by shipping 7% few phones than it did a year ago. How much of this down to all the hassle it’s getting from the US is unclear, but it can’t have helped. The long tail also contracted by 13% at the global smartphone market continued its consolidation towards the big six.

“Worldwide smartphone demand remains mixed for now, with sharp declines in China balanced by strong growth across India and Africa,” said Linda Sui of SA. “Full-year smartphone shipments hit 1.41 billion in 2019, dipping 1 percent from 1.43 billion in 2018, due to mild inventory build in the second half of the year. Looking ahead, US trade wars and the China coronavirus scare will be among barriers to growth for smartphones in 2020.

“Xiaomi had a great quarter in Western Europe and held steady in its biggest market India. Xiaomi is pushing hard into the 5G smartphone category and this will be a solid growth area for the vendor in 2020. Oppo is expanding hard into Western Europe, with new models like the Reno 5G, but it remains under persistent pressure from giant Huawei at home in China.”

“Apple is recovering, due to cheaper iPhone 11 pricing and healthier demand in Asia and North America,” said Neil Mawston of SA. “Samsung’s global marketshare stayed flat at 18 percent, the same level as a year ago. Samsung continues to perform relatively well across all price-bands, from the entry level to premium models such as Galaxy Note 10+ 5G.”

The chances are Apple will carry that momentum into this year and will probably experience a spike when it enters the 5G market in Q4. Demand for 5G phones seems to be exceeding expectations, so it wouldn’t be surprising to see the whole market return to growth in 2020.

 

Early 5G smartphone market all about Samsung and Huawei

Research firm Strategy Analytics has been looking at last year’s 5G smartphone shipments and found most of them were accounted for by just two vendors.

SA says there was more demand for 5G smartphones than it expected. It looks like operators jumped on the future-proofing bandwagon, even though any 5G devices they sold would probably only get a 5G connection in their own HQ, and even then only if you were actually sat on a base station. As a consequence SA says around 19 million 5G phones were shipped, with almost three quarters of those made by Samsung or Huawei.

“Global 5G smartphone shipments grew from zero in 2018 to 18.7 million units in 2019,” said Ken Hyers of SA. “Demand for 5G smartphones is higher than many expected. Fierce vendor competition in China and heavy carrier subsidies across South Korea have been the main drivers of 5G demand. Other regions, like the US and Europe, are lagging behind Asia, but we expect them to close the gap later this year.”

“Almost all Huawei’s 5G smartphones were shipped in China, where US sanctions have made relatively less impact,” said Ville-Petteri Ukonaho of SA. “Popular 5G models for Huawei include the Mate 20 X 5G and Mate 30 Pro 5G. Samsung is number two and shipped 6.7 million 5G smartphones worldwide during 2019, capturing a healthy 36 percent marketshare. Samsung’s 5G smartphone shipments are international and span a wide spread of countries, from South Korea to the UK to the United States. Popular 5G models for Samsung include the Note 10 5G and S10 5G.”

“Upcoming 5G models from Apple iPhone and other big brands mean 5G will be the hottest part of the worldwide smartphone market this year,” said Neil Mawston of SA. “However, the recent coronavirus scare is currently restricting trade in some parts of China and this may well cause a slowdown in 5G supply or demand across Asia or worldwide during the first half of 2020. Industry players should be prepared for bumpy 5G sales in some markets.”

A couple more of them piped up too, but we figure you got the message. The presumed launch of 5G iPhones will definitely take 5G hype into the mainstream and will also put pressure on operators to deliver a network and service that offers something more than 4G. These numbers largely follow the broader smartphone market, given Apple’s early absence thanks to its feeble efforts to strong-arm Qualcomm. It is interesting to see how much of a jump Huawei seems to have got in the Chinese market, however.

 

Global 5G Smartphone Shipments by Vendor (Millions of Units) 2018 2019
Huawei 0.0 6.9
Samsung 0.0 6.7
Vivo 0.0 2.0
Xiaomi 0.0 1.2
LG 0.0 0.9
Others 0.0 1.0
Total 0.0 18.7
     
Global 5G Smartphone Marketshare by Vendor (% of Total) 2018 2019
Huawei 0.0% 36.9%
Samsung 0.0% 35.8%
Vivo 0.0% 10.7%
Xiaomi 0.0% 6.4%
LG 0.0% 4.8%
Others 0.0% 5.3%
Total 0.0% 100.0%
     
Source: Strategy Analytics

US marketing lies about 5G are counter-productive

New research from Strategy Analytics has found that US consumers are so confused by 5G marketing that almost a fifth of them think they already have it.

AT&T set the tone at the start of the year with its ridiculous ‘5GE’ initiative and the marketing departments of US operators have continued to over-promise on 5G ever since, as we recently discussed. It turns out that consistently lying to your customers isn’t always rewarded with their hard-earned cash an undying loyalty.

Research firm Strategy Analytics surveyed a bunch of US consumers and, while the majority of them reckon they know a thing or two about 5G, 17% of them think they’re actively using it. The accurate proportion is closer to 0.00017%. Even more hilarious is the finding that US Apple users think they’re the 5G users, despite the company not having even entered that market yet.

“one of the biggest challenges to overcome is ensuring consumers know what they already have – and how they will benefit from 5G in the future,” said Paul Brown of SA. “Reliable connectivity and guaranteed quality are key drivers, but consumers are not prepared to pay over the odds for this technology. OEM’s must find a way to drive adoption through a demonstration of need, and by virtue of this need, fixing consumer pain-points. Brand and wow-factors alone will only go so far.”

“Outside of Apple and Samsung, the battle for 5G will largely be in the mid-tier – smartphones with a retail price of $600 and below,” said SA’s Christopher Dodge. “A wave of new entrants for 5G from China, as well as new Nokia devices, could be also be damaging to brands such as LG and Motorola, who are most at risk given their low repeat purchase intentions in the 5G era.”

SA is too polite to say it, but the clear conclusion is that, once more, US marketing departments are jumping the gun when it comes to the next generation of cellular technology. Operators are so desperate to find something that will persuade their subscribers to upgrade and bolster their beleaguered ARPUs that they’re clinging to 5G like a life raft. They all need to go on holiday, have a drink and just chill out for a bit before they ruin it for everyone.

Apple forecast to dominate the 5G smartphone market next year

A report from analyst firm Strategy Analytics reckons that then Apple launches its 5G iPhones next year it will immediately become the biggest 5G player.

Right now SA says Samsung has around 40% of the market and Huawei has another 30%. Apple hasn’t launched a 5G phone yet, thanks in part to it trying to get tough with 5G modem leader Qualcomm, before eventually capitulating. That’s all set to change when the next lot of iPhones gets launched, Which SA says will all be 5G enabled.

“It may seem counterintuitive that Apple, which currently has no 5G phones in its portfolio will be able to pass current 5G market leaders Samsung and Huawei,” said SA’s Ken Hyers. “But with three new 5G models coming next year, Apple merely needs to match its current upgrade rates for newly introduced iPhone models to take the lead next year.”

“Currently Samsung is the undisputed market leader in 5G smartphones,” said Ville-Petteri Ukonaho, of SA. “But with the two largest 5G markets in 2020, China and the USA, dominated by Huawei and Apple respectively, these two vendors are set to lead in 5G next year.”

Eventually, however, the balance will inevitably be restored at 5G modems find their way further down the Android product stack. “Despite the strong showing that is expected for Apple in 5G in 2020, in the longer term Samsung will regain the 5G crown,” said Hyers. As more markets cut over to 5G, Samsung will capture the majority of that share by virtue of its dominance of the overall smartphone market and a broader portfolio of 5G devices across more price-bands.”

“Huawei’s potential in 5G smartphone sales is currently limited by the US technology trade ban,” said Ukonaho. “Huawei is dominant in China and will likely remain so. But until the ban is lifted, prospects for Huawei in 5G smartphone sales elsewhere are limited. Regardless of its long-term prospects in terms of 5G smartphone marketshare. 2020 will be Apple’s time to grab bragging rights in 5G.”

Here’s the SA forecast chart, showing Apple quickly grabbing a 40% share of the 5G market and topping 50% by the end of the year. As Hyers indicated the forecasting is simply based on the historical uptake of new iPhones, which seems fair enough. If Apple decides some of its new iPhones are undeserving of a 5G modem then the things could look pretty different.

Global smartphone market returns to growth, driven entirely by Samsung and Huawei

Shipments in the global smartphone industry returned to growth for the first time in two years according to the latest numbers from Strategy Analytics.

A total of 366 million smartphones were shipped in Q3 2019, which is 2% up on the year-ago number. Only two vendors experienced growth themselves, however, with market leader Samsung up 8% and second-placed Huawei up 29%. Huawei has doubled its share of the global smartphone market in the past three years, largely at the expense of the long tail, with once prominent brands like Sony, HTC and Alcatel being swallowed up.

“Samsung shipped 78.2 million smartphones worldwide in Q3 2019, jumping 8 percent annually from 72.3 million units in Q3 2018,” said Neil Mawston of SA. “Samsung has lifted its global smartphone marketshare from 20 percent to 21 percent in the past year. Strong sales of the premium Galaxy Note 10 and mass-market A Series models boosted Samsung’s smartphone shipments and profit during the quarter.

“Huawei once again surprised everyone and grew its global smartphone shipments by an impressive 29 percent annually from 51.8 million during Q3 2018 to 66.7 million in Q3 2019. Huawei captured a record 18 percent global smartphone marketshare in Q3 2019, up sharply from 14 percent a year ago. Huawei surged at home in China during the quarter, as the firm sought to offset regulatory uncertainty in other major regions such as North America and Western Europe.”

That’s an understatement if we compare SA’s global numbers with Canalys’s China ones from yesterday. Canalys has Huawei’s shipments in China alone increasing by 16.5 million units, while SA has its global shipments increasing by 12.5 million. In other words Huawei shipments to everywhere except china decreased by 4 million, which is considerable.

There’s something odd about those Huawei China numbers. To suddenly grab 18 points of market share in such an incredibly competitive market stretches the limits of plausibility. But even if we assume the numbers are legit, Huawei must have made some pretty exceptional business moves to pull them off and we have to question how sustainable they are.